Do you know who your existing and future customers are? The profitable ones?

Last year marked the first year in the US history where majority of children under 9 were non-white (50.8%).   And Nielsen reported that multicultural non-whites represented 92% of the population growth in the US between 2000 and 2014.  This is clearly transforming the US mainstream, and most telling about our nation’s future economically, socially, and politically. And it’s nothing to fear but lots to celebrate. If it weren’t for the multicultural growth, US economy will face the same challenges many European countries currently face, with declining population. This is not just population growth…it is consumer buying power for economic health….it is future talent, as well as political and social norm.  (Click here to see American diversity by generation.)

It is, or at least should be, transforming how marketers and advertiser use culture to connect to existing and future customers. Cultural relevance will be the new branding era in the years to come. Mark my word. Multicultural consumers are empowered and culture-driven, maintaining their cultural heritage while seeing themselves as part of the new mainstream. Nielsen calls this an ambicultural identity—the ability and willingness to function competently in two cultures—simultaneously maintaining cultural heritage while seeing themselves as equally American. (I can personal testify to this, since I am truly ambicultural myself.) More importantly, multicultural consumers over-index on a wide range of products and services. They tend to be younger, trendsetters and tastemakers, expressive and inclusive.

The Nielsen report, The Multicultural Edge: Rising Super Consumers, reports $3.4 trillion multicultural buying power in the US today. Hispanic buying power is projected to be 1.7 trillion in the next four years (by 2019), 1.4 trillion for African Americans and 1 trillion for Asian Americans. The report identifies multicultural Super Consumers, which refer to the top 10% of households who drive at least 30% of sales, 40% of growth and 50% of profits of any consumer product category. And suggests that by understanding the cultural essence that drives multicultural super consumer behavior today, marketers and advertisers can better understand future market trends.

Since they are younger, they comprise a disproportionate share of categories, such as dairy, baby food/diapers, laundry supplies/detergents, school supplies and other family goods. Multicultural consumers gravitate to brands, products and activities that reinforce their cultural roots. Interestingly, these behaviors are affecting the purchase behavior of non-multicultural consumers, too….making many multicultural categories very mainstream, such as hot sauce, tacos, pizza, sushi, soul food, and other once-ethnic foods that have become as ubiquitous as apple pie and hot dogs. (I think we’re headed that way with Korean tacos and Indian somosas.) We’ve been seeing the multicultural influence in music, fashion and sports for years now.

When I speak of multiculturalism, I never exclude Whites….they have and will always be a major part of multicultural consumers and societies. But for statistical purposes, please note that US Census Bureau defines multiculturalism as being composed of several different race categories – Black, American Indian, Pacific Islander, Other, and Two or More Races, including Hispanics (which is an ethnicity, not race). With that in mind, Multicultural consumers are the fastest growing segment of US population, over 120 million strong and increasing by 2.3 million per year.   Currently 38% of the population but expected to become the numeric majority by 2044. But interestingly, EthniFacts research showed, based on a series of more dynamic factors such as mixed-race marriages and families, that the tipping point was actually August 2014.

Gone are the days you can look at each ethnic group individually for your brand strategies. Diversity and multiculturalism is so much more blended and dynamic than cultural silos.

Net, net, understanding how purchase patterns and behavior preferences are driven by multicultural values, beliefs and lifestyles is and will be the key to the total market growth in the near future. While each ethnicity and race have their own unique cultural nuances, the key, I believe, is to leverage commonalities in beliefs and values and embrace the inclusion in the new mainstream….understand and embrace the ambicultural essence of this growing population. Google realized this growth opportunity when they reported 66% of digital Hispanics responding to online ads vs. 47% of general market consumers. And, surely, they conducted a study with Ipsos letting everyone know the considerable growth in Spanish language search queries across many industries (retail +210%, telecom +107%, health +80%, skincare +75%, food +70%, autom0tive +65%, beauty +65%). This wasn’t done just to show the role of culture and language online….it was means to celebrate growth for Google in the years to come.

Last month, I wrote a blog about the profit potential of multicultural leadership and company performance.  You would think that leaders will, or should, know that their senior team needs to represent The New World Marketplace…. but unfortunately, that isn’t so.  Click here to read about how diversity yield to higher financial returns.

Now ask yourself, do you really know who your existing and future customers are? Can you imagine what the future leaders of our nation will look like? Are you ready to forsake your past prejudices and orthodoxies for the sake of growth?

The time is NOW….!!!

 

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